Garmin Hits New Lows, Despite Booming GPS Biz

Here is a poster-child for how hot sectors don't always translate into hot stocks: The GPS business is booming, with such location devices being the hot product this past Christmas, and lots of heat, but sector kingpin Garmin (GRMN) is touching new 52-week lows today.

My friend Om is, as always, right there on the "death of GPS" story. Good stuff.

Comments

[cautious:]

Check out Garmin’s web-site to see how they’re selling pure software for Blackberries, Nokia and now Samsung. Garmin also has a growing fleet management line of products to assist businesses. Nuviphone, dedicated PNDs, Avionics, Marine, hiking/fishing, pet monitoring, real time traffic and weather, collaborations with Google, etc. - the diversity of their product offerings is amazing. They are poised to make big money off those who want dedicated PNDs AND those who want smart/cell phone GPS. Buy the stock now while the media herd universally adopts the Jim Cramer universal gadget theory of Garmin’s demise. The fools don’t understand Garmin’s business and spend too much time with urban techno yuppies who think nothing of plunking down $800 every year on the latest unigadget. The rest of us prefer more cost effective technology solutions that are user friendly and tailored to our needs.

2008 Apr 01 11:12 AM

[growththrup...:]

-Having been in the (professional, -not consumer) GPS industry for 18 years, there is one thing I can say with absolute certainty: Stock analysts do not know anything about GPS. They don't know what it is used for apart from getting directions to the nearest liquor store. Just the fact that they continuously compare Garmin to Trimble should be a warning to everyone not to listen to their advice. These two companies are completely different, with different business models and different users. Garmin is a strong company with strong fundamentals that will continue to enjoy great profits for the next decade or more.

2008 Apr 01 04:48 PM

[User 171323:]

Well spoken and patience will always prevail. This is a strong company with the most important think. Intelligent managment!!!

2008 Apr 01 05:32 PM

[joe gold:]

I don't know what this guy is talking about! Zero substance!
This guy must be over 80, still trying to figure out the VCR.
Did he mention TomTom?
Garmin inked an extension with Navteq into 2015. For Free!!! Which is a far cry from $4 billion for TeleAtlas who barely turned their first profit.
I (unfortunately) am NOT a shareholder of Garmin, a buddy of mine picked it up a few years back while I was asleep at the switch. I've been following it religiously ever since, more so then anything else actually in my portfolio.
This is just the beggining of GPS, and with...

commanding marketshare
solid management
huge---almost triple digit growth---consistently
strategic synergies and a clear understanding of future trends

And what about their Balance sheet???
We're in the midsts of a credit crunch, a recession, and these guys don't owe a dime, they actually have an impressive cash position.

Yeah I'm not sure about this guy!

2008 Apr 01 05:39 PM

[streamertyer:]

Since when does 3 sentences constitute an article? Seems in the blogosphere there is more emphasis on linking to others than providing real content. Comment about analysts who compare Trimble and Garmin is spot on. Anyone who knows anything about this space knows these two companies have completely different focus markets. For chipmakers who end up being commodities eventually, like SiRF, the party may be over, however for the pnd makers like GRMN, I think there is a lot of room for growth with new features and applications driving sales down the road. You certainly have to like the balance sheet of this market leader.

2008 Apr 02 08:38 AM

[electric car:]

S&P rates GRMN a FIVE STAR stock with a 12 month target of $105. I'm underwater in this stock at this time but the risks have been priced in. I look for recovery going forward.

2008 Apr 02 10:56 AM

[hardrookwar:]

How many times is the same news going to drive this stock down? Today it was a Tom Tom warning. Why would GRMN drop (again) after its CFO just gave a 40-50% of Q4 guidance, after Q4 news was blockbuster--albeit with clearly explained declining margins, after everyone sees Nokia buying NVT, after GRMN already stepped back from TeleAtlas bid? Come on! Anticipation of this brought it down from 124/sh. Dividend is still .75/sh, and earnings will be around 4.20/sh, making the current PE around 11. Ridiculous for a LBS stock in a burgeoning market. I'm long, but no way am I panicked. Where will GRMN be in 1, 2, 3, 5 years? Only the most dominant GPS player in the nascent LBS market. Let me tell you, my iPhone can't touch my Garmin 60cs and probably never will. Would someone loan me some cash so I can make a bundle in GRMN? I predict 80/sh by xmas. A GRMN in every car, GRMN software in 30% of phones, GRMN in every plane and boat.

2008 Apr 08 06:32 PM

[User 175238:]

I agree with you on this. It's the stock acting irrational and producing an awesome price on a great stock. And that 80 prediction is maybe 10/15 too high for this year, but 2009 should see continued growth. Europe and international investors are just picking up on GRMN, its newer models should also do well domestically. Its a BUY, at a great value....just expect HIGH volatility.


On Apr 08 06:32 PM User 175184 wrote:

> How many times is the same news going to drive this stock down?
> Today it was a Tom Tom warning. Why would GRMN drop (again) after
> its CFO just gave a 40-50% of Q4 guidance, after Q4 news was blockbuster--albeit
> with clearly explained declining margins, after everyone sees Nokia
> buying NVT, after GRMN already stepped back from TeleAtlas bid?
> Come on! Anticipation of this brought it down from 124/sh. Dividend
> is still .75/sh, and earnings will be around 4.20/sh, making the
> current PE around 11. Ridiculous for a LBS stock in a burgeoning
> market. I'm long, but no way am I panicked. Where will GRMN be
> in 1, 2, 3, 5 years? Only the most dominant GPS player in the nascent
> LBS market. Let me tell you, my iPhone can't touch my Garmin 60cs
> and probably never will. Would someone loan me some cash so I can
> make a bundle in GRMN? I predict 80/sh by xmas. A GRMN in every
> car, GRMN software in 30% of phones, GRMN in every plane and boat.

2008 Apr 08 08:58 PM